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Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

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Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#231

Post by gonzo41 »

turbinerneiter wrote: post #15

Teslas price is just too high. I think they will be very successful and become a big, dominant car maker. But their price only makes sense if they end up being the only car maker left. That's not realistic. Building an electric car is not that hard, especially if Tesla already did all the hard lifting for you. For a while I was thinking that the battery play - becoming the number 1 battery supplier - will justify the…

Telsa's only significant achievement was to create a company structure that allowed it to pursue a loss making manufacturing startup to begin with. The big auto makers have golden handcuffs and can't risk that sort of paradigm shift to a new market. Now they know people will buy them they will easily retool towards electric. I think Tesla will either be crushed or end up a midsized player.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#232

Post by TeMPOraL »

notJim wrote: post #134

I wonder if due to the increase in retail trading activity, stocks are becoming less and less tethered to fundamentals. Retail people buy stocks in companies they like, and that they see as the future, regardless of whether the pricing "makes sense" or not according to traditional metrics.

I have a feeling stocks had little to do with fundamentals for pretty much as long as you were able to make more money trading them than from dividends.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#233

Post by rwcarlsen »

TeMPOraL wrote: post #203
underwater wrote: post #199

Earlier quoted context omitted.

iPhones are not a commodity product. At the moment Teslas are. How will Tesla convince consumers that their car, with a high profit margin, is worth it over a mature EV vehicle from Ford, BMW, etc.

As of right now, the most mature EVs are Teslas. They've established themselves as the gold standard of EVs. If anything, their main hurdle is still convincing consumers to buy EVs instead of ICE cars.

When they provide an interior that isn't inferior to ICE cars (e.g. physical buttons and readings/dials in front of the driver) - and don't lose half their battery life for me in the winter heating the vehicle - then I'll probably buy an EV.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#234

Post by tomp »

seem_2211 wrote: post #154
fullshark wrote: post #136

Earlier quoted context omitted.

> I'd be more skeptical but EVs are eventually going to cost way less to make than typical ICE (internal combustion engine) cars, and per unit that savings translates into a lot of fucking profit. What's the basis for this? Battery tech evolution and ICE cars have no more (safe) optimizations to make to get costs down?

This is also predicated on the idea that every part of Tesla's operations are substantially better than existing automakers. Do people really believe that Tesla is literally run 10x better than Toyota, Volkswagen, Daimler, BMW or Honda? I don't think so. Then there's the nightmare of trying to appeal to two wildly different consumer groups. At the low end: does Tesla have a meaningful reliability advantage versus Hon…

> why would anyone buy a Tesla over a comparatively priced Audi, Porsche, Mercedes or BMW

Because you want to drive far?

Tesla model 3 range: 354 - 504 km

Porsche Taycan range: 333 - 463 km

(and most certainly not comparatively priced)

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#235

Post by TeMPOraL »

rsj_hn wrote: post #229
TeMPOraL wrote: post #203

Earlier quoted context omitted.

As of right now, the most mature EVs are Teslas. They've established themselves as the gold standard of EVs. If anything, their main hurdle is still convincing consumers to buy EVs instead of ICE cars.

I would say there are three main hurdles: * Convincing the public to spend 50-70K on a car * Convincing the public to buy an EV * Convincing the public that Tesla can be trusted for long term repair costs/reliability Right now Tesla is squarely in the luxury vehicle market, competing against Lexus/BMW/Mercedes, rather than against Mazda/Honda/Kia, and it's a new automaker, so we don't have good long term reliability…

Fair enough. Especially the third one. Especially outside US.

I've been joking to my wife for years now that we should get a Tesla eventually. Over that time, I've seen her going from "what's up with these EVs anyway?", through "that's a really expensive car", to "sure, but if anything breaks, IIRC the closest shop that can repair it is in Norway".

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#236

Post by belval »

touisteur wrote: post #208
Seanambers wrote: post #188

Earlier quoted context omitted.

No, that is extraordinary. Are you really comparing a software and IT company with a car manufacturer?

Apple isn't a hardware company anymore?

If you look at their where their 25% profit margins come from then no, they aren't a hardware company. If Apple tried to make a car tomorrow they would not have 25% margins on it.

From a market valuation standpoint, this is also why Apple valuation is 44 times higher than Ford's.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#237

Post by nunez »

anyfoo wrote: post #227
nunez wrote: post #215

Earlier quoted context omitted.

Outsourced using in-house designs, and, in Tesla's case, in-house assembly lines and factories. Even the SPEAKERS inside of the Model 3 and Y are designed by Tesla (and manufactured by a vendor). That's the big difference. It's also the reason why legacy manufacturers will struggle to effectively respond to Tesla. It takes a LOT of money and egos to upend generations of culture (and accept hundreds of millions in los…

> Even the SPEAKERS inside of the Model 3 and Y are designed by Tesla In this particular case, is this really a good thing? Porsche's high end option for example is getting the speakers, amplifiers, tuned filters etc. from Burmester. Since Burmester specializes on this kind of thing, and the sound system (not the head unit and interface) are pretty much entirely distinct from the rest of the car, except that it has t…

Naïvely, I would think that having audio engineers in-house from companies like Harmon and Burmester that specialize in car audio but specifically to Tesla's product line would produce better, cheaper results than paying those companies to white-label audio systems.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#238

Post by MomoXenosaga »

seem_2211 wrote: post #154
fullshark wrote: post #136

Earlier quoted context omitted.

> I'd be more skeptical but EVs are eventually going to cost way less to make than typical ICE (internal combustion engine) cars, and per unit that savings translates into a lot of fucking profit. What's the basis for this? Battery tech evolution and ICE cars have no more (safe) optimizations to make to get costs down?

This is also predicated on the idea that every part of Tesla's operations are substantially better than existing automakers. Do people really believe that Tesla is literally run 10x better than Toyota, Volkswagen, Daimler, BMW or Honda? I don't think so. Then there's the nightmare of trying to appeal to two wildly different consumer groups. At the low end: does Tesla have a meaningful reliability advantage versus Hon…

Realism is the problem. BMW and Volkswagen are boring. Not much to hype. They just sell cars not tech nerd dreams.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#239

Post by xedeon »

rsj_hn wrote: post #229
TeMPOraL wrote: post #203

Earlier quoted context omitted.

As of right now, the most mature EVs are Teslas. They've established themselves as the gold standard of EVs. If anything, their main hurdle is still convincing consumers to buy EVs instead of ICE cars.

I would say there are three main hurdles: * Convincing the public to spend 50-70K on a car * Convincing the public to buy an EV * Convincing the public that Tesla can be trusted for long term repair costs/reliability Right now Tesla is squarely in the luxury vehicle market, competing against Lexus/BMW/Mercedes, rather than against Mazda/Honda/Kia, and it's a new automaker, so we don't have good long term reliability…

>Convincing the public to spend 50-70K on a car

The Model 3 SR+ starts at $39k. For a while, the Model 3 SR was available by special order for only $35K [1] but it did not include autopilot (Autosteer+TACC) and other things.

For $39K it's actually a tremendous value. If you plan on keeping it for more than 5 years. It will actually beat a comparable Accord/Camry Hybrid in terms of TCO.

"Calculating insurance, maintenance, repairs, taxes, fees, financing, depreciation and cost of electricity, we get the true cost of ownership for the Tesla Model 3 which is $25,209."

2020 Tesla Model 3 SR Plus: $25,209

2020 Toyota Camry Hybrid : $36,571

As for reliability. There are already plenty of really high mileage Teslas out in the wild. Like this guy who put 800,000+ miles on his 2014 Model S: https://twitter.com/gem8mingen

Sources:

[1] https://www.youtube.com/watch?v=w_-_t29bciw

https://www.wheelsjoint.com/toyota-camry-vs-tesla-model-3-co...

https://cleantechnica.com/2019/04/25/tesla-model-3-vs-honda-...

https://cleantechnica.com/2019/09/27/tesla-model-3-vs-toyota...

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#240

Post by babesh »

nawitus wrote: post #165
clomond wrote: post #114

Earlier quoted context omitted.

While I won't dispute that Tesla's share price is high given where the company is at right now when valued as an auto business, there are a few things I think are worth mentioning and commenting on in your post. > Building an electric car is not that hard, especially if Tesla already did all the hard lifting for you. This couldn't be further from the truth. While making a prototype EV is relatively easy, yes. EV indu…

European car brands (combined) sold more EVs in January-March than Tesla. Also, Nissan was selling more EVs than Tesla for many years. It just doesn't seem that difficult to scale EV production. Source: https://insideevs.com/news/504647/global-plugin-sales-march-...

The EU imposes a 10% tariff on imported cars. That makes EU built EVs more competitive within the EU.

Tesla is building that Berlin factory to decrease shipping costs and time and also to not have to pay the tariff.

Perhaps more interesting is that the more popular EVs in Europe are hatchbacks. Hatchbacks are more popular than sedans in many European countries. Tesla is missing a car to compete in that segment.

The current normal of competition between countries is to allow foreign car companies to build factories in their country. I bet that if a country's car industry faces an existential threat, the country will tilt the playing field further in that country's car companies favor.

I do not expect that Tesla will be allowed to wipe out other country's car industries. It may be allowed to become the preeminent EV maker (which it already is if you count by market cap). I think that Tesla will need to try to win in other areas: EVs for countries without strong car industries, energy storage, self driving cars, etc...

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